Agreement Accounts Receivable Without Recourse In Collin

Category:

Contracts - Factoring

State:

Multi-State

County:

Collin

Control #:

US-00037DR

Format:

Instant download

Description

The Agreement Accounts Receivable Without Recourse in Collin is a legal document facilitating the sale of accounts receivable from a seller (Client) to a factor (Factor) without recourse, meaning the Factor assumes the credit risk of the receivables. This agreement establishes the terms under which the Factor purchases the accounts receivable from the Client, including stipulations regarding the assignment of receivables, approval of sales, credit risks, and payment terms. Key features include the obligation for the Client to notify customers of the assignment, the Factor's rights to collect the receivables, and the requirements for financial reporting. Filling out this form requires the Client to provide necessary details such as company names, addresses, and specific terms of the sale. Attorneys, partners, owners, associates, paralegals, and legal assistants may use this form for various purposes, including to secure financing against accounts receivable, manage credit risks efficiently, and streamline collections while maintaining legal protections in business transactions. This agreement not only aids in ensuring a clear understanding of the roles and responsibilities but also facilitates smooth operations for businesses that often rely on credit sales.

Difference between factoring and assignment

View this form

Accounting for equipment finance agreement

View this form

Correction Statement and Agreement

View this form

Right of Way by Tenant (for Pipeline)

View this form

Sample Letter to Confirm a Guest's Attenda...

View this form

Right of Way-Definition-Acquisition-Use

View this form

Form popularity

FAQ

If an assignment of accounts receivable is without recourse, the assignee (the factor) assumes the risk of any losses on collections. If the assignee is unable to collect all of the accounts receivable, it has no recourse against the assignor.

In non-recourse receivables finance, the factor purchases the receivables from the seller and assumes the full debtor default risk. In a recourse transaction, the debtor default risk remains with the seller. Receivables purchased under a non-recourse agreement can generally be removed from the seller's balance sheet.

When a company factors receivables it means that they sell them to another party. If the transaction is without recourse that means the buyer takes on all the risk of credit losses. The seller of the accounts receivable does not bear any risk after the sale is complete.

Factoring without recourse means that the risk of accounts receivable being uncollectible transfers from the buyer to the seller. Basically, if an accounts receivable cannot be collected, the seller does not have to reimburse the buyer like they would if the factoring was “with recourse”.

Article 9 of the UCC protects purchasers of accounts receivable by providing a method to record ownership. Recording the sale of the receivable is accomplished by filing a UCC financing statement.

SALE OF RECEIVABLES: A DEFINITION In selling the Receivable without recourse the seller guarantees only the existence and validity of the receivable at the time in which the sale is made.